Comment by youdontknowtho | Hacker News Reader

Comment by youdontknowtho | Hacker News Reader

The wealthy elite will need to get this through their heads. They must start paying people more. There isn't a choice. Businesses are sitting on trillions of dollars that haven't been used to "create jobs".

EDIT: Jesus. I apologize for making an economic sounding argument for this. I've taken it out. How's this...the wealthy elites need to pay people more for the sake of the stability of the social fabric. Find some economic rational for that if you like. (That's what economists really do anyway...Provide the theoretical underpinnings for the operation of their class.) They need to understand that having slightly smaller profit margins will be good for them as well, in the long run, due to a more stable republic. I understand that, as libertarians, you guys don't think that government can play a part in that. I do. We have a fundamental disagreement about that.

Propitiation follows: I know that all of you guys are very economically literate libertarians. I should never have fronted like I was anywhere in your league. I could tell you were not only attractive but powerful and noble as soon as you came in the room. Your ability to recite the economics that you picked up at Uni is not only impressive but frightening. Surely, your might and prowess will be known through the ages.

>The added demand from paying higher wages to people at the bottom

The business that will pick up the slack in this example is one overseas. These employees would lose their job and would be unemployed, not increasing demand with higher wages.

Unless you are hoping trump enacts some seriously strict trade tariffs, it's pretty stupid to believe that every business hit with this raise will survive with the same number of employees due to increased demand.

Downvoting just because you disagree with something isn't how this site is supposed to work.

My point is that this business is a bad business if it can only exist because the state subsidizes its employees with social programs. Eventually demand will pickup because of the wealth transferred to the lower economic class.

>Downvoting

Don't discuss downvoting in a response to someone. It doesn't make for good discussions. Especially since you're likely not replying to the person who downvoted.

>My point is that this business is a bad business if it can only exist because the state subsidizes its employees with social programs.

Then why couldn't you articulate that in the first comment? It was just a tirade against the wealthy elite mixed in with unsubstantiated claims of increased demand that fail to take into account that the wage increase isn't global.

you can't downvote something you've responded to

I don't believe this is the case. However, you can't downvote a response to your own comment.

Edit to add: To confirm, I still have a downvote arrow available to me on your comment.

I did want to express the part that you call a tirade. Wealthy people need to understand that the parts of their revenue that correspond to taxes that subsidize their employment practices are going to need to be paid as wages. Its at the root of the unfair practices that have created inequality, and it's corrosive to democracy.

I think that the idea that paying people more, who spend more of their income proportionally, increases demand isn't really unsubstantiated. Maybe I didn't substantiate it, but only because I thought it was well known. Apologies for that.

>Wealthy people need to understand that the parts of their revenue that correspond to taxes that subsidize their employment practices

The mistake you are making here is in thinking that the majority of people are employed by wealthy people. Tirades like yours make people believe this is just forcing billionaires to open up their wallets, but 99% of businesses are small businesses and they account for something like 49% of employment.

https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf

So minimum wage increases tend to be more of an attack directly on the middle/lower class small business owners who are operating on thin margins.

>Maybe I didn't substantiate it, but only because I thought it was well known.

Don't pretend like you misunderstood the problem and use a faulty assumption to appeal to incredulity (still without providing evidence nonetheless!). The faulty assumption you built this demand argument on was that all of these businesses will easily absorb the wage increase and there will be no jobs lost. There will be no increase in demand and there may be a loss in demand if a huge chunk of small businesses layoff parts of their workforce or relocate.

Touche, debate captain.

I wonder if the majority of small businesses are able to employ all those people because they force tax payers to subsidize their low wage payments. I guess the question then is whether it is best to have the lower classes struggling to survive on little wages while accruing more and more wealth to the top. Does this arrangement produce enough of a benefit to all involved to obviate the need to redistribute that accumulated wealth.

I think that the accumulated wealth of the 1% needs to be redistributed. I think it's not only better for society, but its also more moral...and I get that I'm using slippery language unlike the "hard science" of economics. (I detest economics because it poses as a science while mainly serving to provide intellectual cover to the purveyors of the status quo.)

So, yeah, I was being a dick. You caught me.

Except that overseas labor isn't going to be dirt-cheap forever. We can keep shifting manufacturing around to different developing countries but it's just kicking the can down the road and saying we'll deal with it later. Eventually Chinese workers and Malaysian workers and all the rest are going to start demanding real wages, and I don't think it's too far away now either. Maybe 20 more years we can keep playing this game but it's going to get harder and harder.

Add to it we're running out of busywork to have people doing, costs of automation are plummeting, jobs that were initially thought by the majority of people to be safe from the robots are turning out to be not-so-safe, and the elite continue to live under the delusion that they can continue stockpiling wealth while the rest of us scrape by.

There are a lot more poor people than rich people, and your money isn't going to help much when they're breaking down your door with torches and pitchforks.

They already are, for example there's been several stories over the years of China losing jobs to Vietnam.

Its always a race to the bottom for costs. What no one talks about is the trail of bodies that are left behind.

A little hyperbolic, but more true than not. The main thing is we're going to reach a critical mass point where the costs of continuing to cut costs are going to become more expensive than what the cost cutting does to the end products.

Existence of cheap labor negatively impacts the investments into robotics. Disappearance of cheap labor makes some numbers (total addressable market, costs per unit produced) look very attractive.

How can a business fail if by definition its sitting on piles of cash? We live in a centrally controlled command economy and all the politicians in charge of selecting winners and losers (except one widely hated guy at the top) were purchased by those very same businesses, so why are you proposing that mutually beneficial system break down?

What would work would be a nice infusion of inflation. You can spend $X today on Y of labor or Z of capex, or hoard it until next year when the same $X will only buy (0.95)Y of labor or (0.95)Y of capex "stuff", your choice how much "stuff" you want to get for your $X

Businesses may be sitting on trillions of dollars of assets, but they also have trillions of dollars of liabilities. Outside of tech, at least in the US, most industries have fairly ugly balance sheets.

Inflation is another debate. Traditionally wages rise later rather than sooner in that environment.

No, they don't have to, if cheaper labor is available. And it is available.

And no, other businesses won't replace them in CA, because their production costs are higher the moment they start the production. It's basic economics.

And then there are robots.

That's one way to look at it. There are examples, though, of states with higher minimum wages out performing neighboring states with lower wages.

Businesses like this can only operate because taxes are used to subsidize their employee's lack of a living wage.

It doesn't make sense to demand businesses give money away any more than it makes sense to demand that random people do. Do you want me to give away most of my income too because some people are poorer than me? Are you setting an example of that yourself?

If you aren't proposing that businesses give away free money, are you instead saying that the government should reduce what it gives away in social welfare for low-wage workers? That could make low wage jobs unworkable if workers can't afford to actually commute to work or live nearby. That would in turn force wages up.

Actually, yes. Yes I do. And yes, I actually do. I don't take income tax deductions for charity payments, even if they are available, and I don't look for creative ways of lowering my tax bills.

I think that I, and people like me, should pay more --proportionally -- to lower levels of inequality before it rips the republic apart. The wealthy actually have the best of all worlds currently. Lower taxes and high government expenditures mean that the government actually has to borrow the money from them to subsidize those low wages. Instead of just taxing them, the government now owes interest.

I think that the wealthy have begun to believe their own bullshit and it's dangerous. Democracy should be used to fix the situation before it becomes worse.

>There are examples, though, of states with higher minimum wages out performing neighboring states with lower wages.

What does "out performing" mean in this regard? Tax revenue, GDP, and employment could all be very high in a state where the majority of people are living worse off than people in other states because of a massive cost of living.

Maybe you could just provide some references to these examples?

I'm actually at work and can't really do that at the moment, but you should feel free to take that as some kind of lie that I'm using to make up for not having proof.

Not every business owner is an elite. This makes starting a business very difficult because now you have to pay minimum wage AND healthcare.

Why don't small businesses lobby for universal healthcare then? I understand the historical reasons, but the idea of healthcare being tied to employment as the best solution we can come up with is kind of baffling. It is a huge obstacle to small businesses.

This is mandated by law. The businesses have fought tooth and nail against ACA employer mandate.

And yet as of today in the United States an employer of 50 or more has to either separate business operations into two distinct units or buy employer-linked insurance.

https://www.uschamber.com/health-reform/employer-mandate

That's not what the question that GP was asking. It was asking about universal health coverage, not employer mandate. GP was wondering why the employer is involved in health insurance in the first place.

> why the employer is involved in health insurance in the first place

I am not sure how it was a different question. The government mandates they become involved.

For most businesses this is not the case

There is very little difference in SPS since the employer will have to pay health tax for each employee, which is often more expensive than just insurance.

You do understand that most countries with universal healthcare force employers to pay at least half the tax and in many cases more right?

There are considerable expenses on top of just salaries when you employ people; most countries have some sort of an "employee tax" levied on employers plus other requirements.

You can say well Europe but the minimum wage (and all other wages) in Europe is lower than California and on average than the US.

It is not true that you have to offer healthcare when starting a business. Only when you reach 50 full-time employees does this even begin to be a concern.

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